Re: Student Loan Forgiveness Act of 2012

Nobody is being asked to pay anything he or she did not agree to when they accepted the loan. I get it that paying back student loans is onerous, but that should not relieve someone from the contract he or she signed in accepting the loan in the first place.

Re: Student Loan Forgiveness Act of 2012

[quote] At the time of completing their studies they find themselves standing with huge debt because of the repayment dues of the loans without having a job.[/quote]

Students should be aware of their job prospects upon graduation. Students should be aware of the consequences of their own choices. Students should not delude themselves with the idea that their education guarantees them a job in "their field" when not everyone graduates with equal levels of experience, education or ability.

Don't give me the institutional promise argument - "They said I would get a job." It's not higher-educations fault you didn't get a job. If you are sub-par, you are not going to get a job in a competitive market and keep it very long. I've met countless people with educations where they might have passed the classes and got the degree, but they had no idea how to do the job, were not naturals in the field, nor were they particularly passionate about the position or career. You think these people deserve to borrow lots of money and never pay it back? The cost of education should be a deterrent for people without passion, people who won't truly bring anything to the work place.

The idea that someone simply goes to school and gets a great job is ridiculous.

Re: Student Loan Forgiveness Act of 2012

Nobody is being asked to pay anything he or she did not agree to when they accepted the loan. I get it that paying back student loans is onerous, but that should not relieve someone from the contract he or she signed in accepting the loan in the first place.

People also contract to pay interest on mortgage loans... and then they are able to deduct the interest amounts they pay from their tax bill. The government is subsidizing home ownership left and right. No one really needs to own a home, right? Some people really do need to be college educated - not just to meet their own, personal goals, but for the betterment of society. If the government is going to subsidize anything, it should be education. And if it were to provide that sort of relief, that would likely, in turn, take care of many of the mortgage issues we currently have. It doesn't benefit our country right now to stand on principle. We have a serious problem.

Re: Student Loan Forgiveness Act of 2012

Students should be aware of their job prospects upon graduation. Students should be aware of the consequences of their own choices. Students should not delude themselves with the idea that their education guarantees them a job in "their field" when not everyone graduates with equal levels of experience, education or ability.

Don't give me the institutional promise argument - "They said I would get a job." It's not higher-educations fault you didn't get a job. If you are sub-par, you are not going to get a job in a competitive market and keep it very long. I've met countless people with educations where they might have passed the classes and got the degree, but they had no idea how to do the job, were not naturals in the field, nor were they particularly passionate about the position or career. You think these people deserve to borrow lots of money and never pay it back? The cost of education should be a deterrent for people without passion, people who won't truly bring anything to the work place.

The idea that someone simply goes to school and gets a great job is ridiculous.

All very true. And that's why higher education, industry and public education need to work together to provide students with an array of options and help them choose the one that fits them best. But in the meantime, which would you prefer:

1) Make the people who have wound up in a bad place (either because they believed the system, they made a bad call, or no good choices were available to them) deal with it, and deal with the negative impacts to the economy that come with that. But, probably get somewhat more revenue back from student loan repayments than you would otherwise.

- or -

2) Help people out, get this generation of young people back on track and hopefully correct some of the faults in the system in the process.

Personally, I'd rather have #2, even if it means bailing out worthless idiots (there are some out there, though less than many might think, I suspect), because when this many people get this stuck, it not only affects all of us, but it speaks to flaws in the system that are more difficult than average to avoid.

I'm a young person, and I spent a lot on my education. I don't regret it, and I'm paying back my loans. I have a well-paying job and bright prospects for an affordable graduate education (granted that I'll probably try to go to Canada for that, but whatever, that's a topic for another forum), and a career that will be personally and financially fulfilling. I did it all right, but I was very lucky to have immense amounts of financial and personal support from my family, teachers and mentors along the way. Even so, in looking back, I realize that I chose my path for all the wrong reasons and seem to have made the right choice by random chance. That gives me a fair amount of sympathy for the people who used the same flawed logic I was instructed to apply and came out on the other side. They're only human after all, and I know I'd be better off if they were.

Re: Student Loan Forgiveness Act of 2012

Nobody is being asked to pay anything he or she did not agree to when they accepted the loan. I get it that paying back student loans is onerous, but that should not relieve someone from the contract he or she signed in accepting the loan in the first place.

People also contract to pay interest on mortgage loans... and then they are able to deduct the interest amounts they pay from their tax bill. The government is subsidizing home ownership left and right. No one really needs to own a home, right? Some people really do need to be college educated - not just to meet their own, personal goals, but for the betterment of society. If the government is going to subsidize anything, it should be education. And if it were to provide that sort of relief, that would likely, in turn, take care of many of the mortgage issues we currently have. It doesn't benefit our country right now to stand on principle. We have a serious problem.

The problem with student loan lending is that there is really no underwriting process to make sure the individual will likely have the means to pay off the loan. For those of us that have applied for a student loand AND a mortgage, which process do you think vetted your ability to repay better? No lender in its right mind should loan $50,000 to a student who wants to borrow the money to get a sociology or communications degree. It's ridiculous.

Past that, there is no collateral attached to the loan. If the individual defaults, there's pretty much nothing the lender can do to immediately satisfy the debt. You can't get blood from a stone. We've allowed a system to be created which ignores the real problem we have. Not everybody is meant to or should go to college. Yet, we tell kids that they are failures if they do not go. There is a large number of people in this country who would have been better served learning a trade or going directly into the job market than financing a liberal arts education that does not better prepare them to enter the workforce.

So, we have kids who are expected to go to college, out of control tuition increases that vastly outstrip inflation, a depressed economy and culture of hiring, yet increasing amounts of student loans are made available which are not collateralized loans and there is not much, if any oversight or discretion on who gets a loan and for how much. We've created a huge bubble in our economy. One trillion dollars is outstanding in student loan debt in this country. If it weren't for all the free money available, many could not afford to go to college. I expect if the lending were reduced or regulated better, the price of education would come down because colleges and universities could not rely on the lenders to get the students in the door.

The mentality of lenders giving money out to folks who are unlikely to be able to repay the loans is exactly what was at the heart of the real estate bubble popping in 2008, which has destroyed this economy. But, it seems we are always looking for the next economic bubble and are somehow shocked, just shocked when it pops. Sorry for the tangent.

Back to the subject at hand, I don't know how much of the $1,000,000,000,000.00 (one trillion) in student loans that is currently outstanding in this country is owned by the federal government. Let's, for the sake of argument, say the government owns half of that. That's 500 billion dollars. Let's say student loan forgiveness results in 10% of that amount being forgiven. That's 50 billion dollars. Writing off that amount of debt would create a massive budget shortfall, which our cash-strapped government really can't afford. It would be forced to either cut programs or increase taxes. The beneficiaries of cut programs or taxpayers in general, depending on how the budget shortfall would be addressed, would be the ones that bear the cost of forgiving the debt. Call me crazy, but I think the people who borrowed the money should repay it, not the rest of the population that either didn't borrow or repaid it as agreed.

Re: Student Loan Forgiveness Act of 2012

Back to the subject at hand, I don't know how much of the $1,000,000,000,000.00 (one trillion) in student loans that is currently outstanding in this country is owned by the federal government. Let's, for the sake of argument, say the government owns half of that. That's 500 billion dollars. Let's say student loan forgiveness results in 10% of that amount being forgiven. That's 50 billion dollars. Writing off that amount of debt would create a massive budget shortfall, which our cash-strapped government really can't afford. It would be forced to either cut programs or increase taxes. The beneficiaries of cut programs or taxpayers in general, depending on how the budget shortfall would be addressed, would be the ones that bear the cost of forgiving the debt. Call me crazy, but I think the people who borrowed the money should repay it, not the rest of the population that either didn't borrow or repaid it as agreed.

I'm right with you on your tangent.

On this last paragraph that I've quoted, though: How likely do you think it is that these people are actually going be able to pay it? What's happening right now is that people are defaulting. That means no money for the government, then even less money for the government as a result of supporting the bureaucratic nightmare of default. It also means financial wreckage for the people who default. And, for many of the people who are paying, it means much less money actively feeding our disaster of an economy.

The fix here is not to keep traveling the same road. If a short(ish)-term loss for the government means long-term gain, that's the better option.

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